BILL NUMBER: AB 1635	CHAPTERED  10/10/99

	CHAPTER   605
	FILED WITH SECRETARY OF STATE   OCTOBER 10, 1999
	APPROVED BY GOVERNOR   OCTOBER 5, 1999
	PASSED THE ASSEMBLY   SEPTEMBER 9, 1999
	PASSED THE SENATE   SEPTEMBER 7, 1999
	AMENDED IN SENATE   JUNE 3, 1999

INTRODUCED BY   Committee on Revenue and Taxation (Knox (Chair),
Kaloogian (Vice Chair), Aroner, Briggs, Ducheny, Honda, and Romero)

                        MARCH 3, 1999

   An act to amend Sections 18521, 19347, and 19384 of the Revenue
and Taxation Code, relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1635, Committee on Revenue and Taxation.    Franchise and
income taxes:  deficiencies:  actions:  returns.
   Existing laws pertaining to the administration of franchise and
income taxes provide that the Franchise Tax Board may abate the
assessment of interest in certain cases, and the taxpayer may, within
180 days after the board's notice not to abate interest, appeal the
board's determination to the State Board of Equalization.  Those laws
also specify the requirements for bringing an action with respect to
that interest.
   This bill would specify that a taxpayer may bring an action after,
among other things, a determination by the State Board of
Equalization, including the issuance of a decision, opinion, or
dismissal on a petition for rehearing, as provided.
   Existing law pertaining to the administration of the Personal
Income Tax Law requires, except as provided, an individual to use the
same filing status that he or she used on his or her federal income
tax return.
   This bill would provide that the Franchise Tax Board may revise
the return to reflect a correct filing status.  This bill would also
clarify the requirements to filing a joint nonresident return and
filing status of an individual who is not required to file a federal
income tax return, as provided.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 18521 of the Revenue and Taxation Code is
amended to read:
   18521.  (a) (1) Except as otherwise provided in this section, an
individual shall use the same filing status that he or she used on
his or her federal income tax return filed for the same taxable year.

   (2) If the Franchise Tax Board determines that the filing status
used on the taxpayer's federal income tax return was incorrect, the
Franchise Tax Board may, under Section 19033 (relating to deficiency
assessments), revise the return to reflect a correct filing status.
   (3) If either spouse was a nonresident for any portion of the
taxable year, a husband and wife who file a joint federal income tax
return shall be required to file a joint nonresident return.
   (b) In the case of an individual who is not required to file a
federal income tax return for the taxable year, that individual may
use any filing status on the return required under this part that he
or she would be eligible to use on a federal income tax return for
the same taxable year if a federal income tax return was required.
   (c) Notwithstanding subdivision (a), a husband and wife may file
separate returns under this part if either spouse was either of the
following during the taxable year:
   (1) An active member of the armed forces or any auxiliary branch
thereof.
   (2) A nonresident for the entire taxable year who had no income
from a California source.
   (d) Except for taxpayers described in subdivision (c), for any
taxable year with respect to which a joint return has been filed, a
separate return shall not be made by either spouse after the period
for either to file a separate return has expired.
   (e) No joint return shall be made if the husband and wife have
different taxable years; except that if their taxable years begin on
the same day and end on different days because of the death of either
or both, then a joint return may be made with respect to the taxable
year of each.  The above exception shall not apply if the surviving
spouse remarries before the close of his or her taxable year, or if
the taxable year of either spouse is a fractional part of a year
under Section 443(a) of the Internal Revenue Code.
   (f) In the case of the death of one spouse or both spouses the
joint return with respect to the decedent may be made only by the
decedent's executor or administrator; except that, in the case of the
death of one spouse, the joint return may be made by the surviving
spouse with respect to both that spouse and the decedent if no return
for the taxable year has been made by the decedent, no executor or
administrator has been appointed, and no executor or administrator is
appointed before the last day prescribed by law for filing the
return of the surviving spouse.  If an executor or administrator of
the decedent is appointed after the making of the joint return by the
surviving spouse, the executor or administrator may disaffirm the
joint return by making, within one year after the last day prescribed
by law for filing the return of the surviving spouse, a separate
return for the taxable year of the decedent with respect to which the
joint return was made, in which case the return made by the survivor
shall constitute his or her separate return.
  SEC. 2.  Section 19347 of the Revenue and Taxation Code is amended
to read:
   19347.  Within 90 days after the mailing of the notice of the
Franchise Tax Board's action disallowing interest upon any refund
claim, or, in the case of an appeal to the board from the
disallowance of interest on any refund claim, within the 90 days
after the board's determination (including the issuance of a
decision, opinion, or dismissal) of the appeal becomes final pursuant
to Section 19346, the taxpayer may bring an action against the
Franchise Tax Board on the grounds set forth for interest in the
claim for the recovery of the interest.
  SEC. 3.  Section 19384 of the Revenue and Taxation Code is amended
to read:
   19384.  The action provided by Section 19382 shall be filed within
four years from the last date prescribed for filing the return or
within one year from the date the tax was paid, or within 90 days
after (a) notice of action by the Franchise Tax Board upon any claim
for refund, or (b) the determination (including the issuance of a
decision, opinion, or dismissal) by the State Board of Equalization
on an appeal from the action of the Franchise Tax Board on a claim
for refund becomes final pursuant to Section 19334, whichever period
expires the later.
  SEC. 4.  The amendments made by Sections 2 and 3 of this act shall
be operative for any determination made by the State Board of
Equalization that becomes final pursuant to Section 19334 and 19346
of the Revenue and Taxation Code on or after January 1, 2000.
